United states Africa strategy to focus on increasing investment and countering rising Chinese influence

In a speech in Washington, D.C., on Thursday, National Security Advisor John Bolton presented the White House’s Africa strategy. The strategy is focused on three areas: advancing U.S. trade and commercial ties in Africa, pushing back against Islamic terrorism and violent conflict, and using U.S. aid more “efficiently and effectively to advance peace, stability, independence, and prosperity in the region.”

A key point of emphasis in the strategy is to counter rising Chinese and Russian political and economic influence on the continent. Attacking Chinese engagement in Africa, Bolton noted, “China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.” Bolton also attributed the current debt buildup in Zambia and Djibouti to Chinese lending and highlighted the possibility of Chinese state-owned enterprises taking over key infrastructure such as ports and utility companies in those nations. Additionally, Bolton briefly noted the current administration’s intention to pursue new comprehensive bilateral trade agreements with African countries.

To step up U.S. economic engagement in Africa, Bolton announced the creation of a “Prosper Africa” program that will support investment in the region. However, Judd Devermont, director of the Africa Program at the Center for Strategic and International Studies, highlighted that the speech provided few “details on what the ‘Prosper Africa’ approach looks like and how it will be resourced.” Similarly, Landry Signé, a fellow at the Brookings Institution’s Africa Growth Initiative, commented that “the strategy doesn’t seem sufficient to effectively address the United States’ threatened economic, security, and influence interests.”

Tensions ignited as DRC elections approach

On Thursday, 10 days ahead of a presidential election in the Democratic Republic of the Congo (DRC) that gained international attention when Joseph Kabila, the current president, announced that he would not run again, a fire destroyed an election commission warehouse in the capital city, Kinshasa.

The warehouse contained thousands of new voting machines, which have been a source of controversy as elections approach, opposition coalitions contesting the upcoming December 23 elections have alleged that the machines are more vulnerable to vote-rigging and could be compromised by the unreliability of the DRC’s power supply. Analysts and activists, including 2018 Nobel Peace Prize winner Denis Mukwege, have warned that if polls are seen as fraudulent the country could face years of protests and conflict.

Earlier this year, DRC’s incumbent president Joseph Kabila backed his minister of the interior, Emmanuel Ramazani Shadary, to run for president. As Brookings Nonresident Senior Fellow John Muku Mbaku stated, “The announcement was seen as extremely important because it ended many years of uncertainty regarding whether or not Kabila would eventually eliminate presidential term limits and remain in power indefinitely.”

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By Payce Madden
United states Africa strategy to focus on increasing investment and countering rising Chinese influence
In a speech in Washington, D.C., on Thursday, National Security Advisor John Bolton presented the White House’s Africa strategy. The strategy is focused on three areas: advancing U.S. trade and commercial ties in Africa, pushing back against Islamic terrorism and violent conflict, and using U.S. aid more “efficiently and effectively to advance peace, stability, independence, and prosperity in the region.”
A key point of emphasis in the strategy is to counter rising Chinese and Russian political and economic influence on the continent. Attacking Chinese engagement in Africa, Bolton noted, “China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.” Bolton also attributed the current debt buildup in Zambia and Djibouti to Chinese lending and highlighted the possibility of Chinese state-owned enterprises taking over key infrastructure such as ports and utility companies in those nations. Additionally, Bolton briefly noted the current administration’s intention to pursue new comprehensive bilateral trade agreements with African countries.
To step up U.S. economic engagement in Africa, Bolton announced the creation of a “Prosper Africa” program that will support investment in the region. However, Judd Devermont, director of the Africa Program at the Center for Strategic and International Studies, highlighted that the speech provided few “details on what the ‘Prosper Africa’ approach looks like and how it will be resourced.” Similarly, Landry Signé, a fellow at the Brookings Institution’s Africa Growth Initiative, commented that “the strategy doesn’t seem sufficient to effectively address the United States’ threatened economic, security, and influence interests.”
IMF support for economic reforms and diversification in Angola
The International Monetary Fund (IMF) has approved a $3.7 billion, three-year credit to Angola aimed at supporting the country’s economic reform program. According to the IMF, the credit will support Angola to develop private sector-led economic diversification and restore external and fiscal sustainability. Nearly $1 billion will be made immediately available, while the remainder will be phased in over the duration of the program, subject to semi-annual reviews.
While Angola was once Africa’s largest oil producer, output has declined in recent years, putting a significant strain on an economy, which is heavily reliant on oil exports. Angola’s state-run oil and gas company has increased its efforts to attract foreign investors and expand exploration activities in order to stabilize output, as oil production continues to account for approximately 80 percent of Angola’s government revenue. The government views diversification as an important measure to bolster the economy, however, particularly after the 2014 drop in oil prices.
Angola’s macroeconomic stabilization program focuses on strengthening fiscal sustainability, reducing inflation, promoting a more flexible exchange rate, and improving financial sector sustainability. Structural reforms also aim to diversify the oil-dependent economy to reduce fiscal risks and foster private sector development.
Tensions ignited as DRC elections approach
On Thursday, 10 days ahead of a presidential election in the Democratic Republic of the Congo (DRC) that gained international attention when Joseph Kabila, the current president, announced that he would not run again, a fire destroyed an election commission warehouse in the capital city, Kinshasa.
The warehouse contained thousands of new voting machines, which have been a source of controversy as elections approach, opposition coalitions contesting the ... By Payce Madden
United states Africa strategy to focus on increasing investment and countering rising Chinese influence
In a speech in Washington, D.C., on Thursday, National Security Advisor John Bolton presented the White House’https://www.brookings.edu/blog/brookings-now/2018/12/14/charts-of-the-week-africa-data/Charts of the week: Africa datahttp://webfeeds.brookings.edu/~/586607740/0/brookingsrss/topics/subsaharanafrica~Charts-of-the-week-Africa-data/
Fri, 14 Dec 2018 20:23:53 +0000https://www.brookings.edu/?p=553133

IN 2017 sub-Saharan Africa’s MVA was about $145 billion

Signé, who is a David M. Rubenstein Fellow in the Global Economy and Development Program at Brookings, also studied the potential of manufacturing and industrialization in Africa. In that report, he calls attention to some “worrying trends,” including low manufacturing value added in Africa compared to the rest of the world. However, he notes, “manufacturing in Africa has grown 3.5 percent annually from 2005 to 2014—faster than it has in the rest of the world.”

In 2019, about 70 percent of the world’s poor will live in Africa

Homi Kharas, Kristofer Hamel, and Martin Hofer, writing on the reduction of extreme poverty worldwide, say that “the good news is that 2019 will start with the lowest prevalence of extreme poverty ever recorded in human history—less than 8 percent.” However, the reduction rate is slowing, and Africa’s share is rising. “However,” the authors add, “there is light at the end of the tunnel. In 2019, for the first time since the enactment of the [Sustainable Development Goals], Africa will start reducing the absolute number of people living in extreme poverty, albeit very modestly.”

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https://www.brookings.edu/wp-content/uploads/2016/01/south_africa_flags001.jpg?w=296By Fred Dews
Three charts highlighting trends and data related to Brookings research on sub-Saharan Africa. For more analysis and commentary on this topic, visit the Africa Growth Initiative, and also visit AGI's weekly series “Africa in Focus Figures of the Week.”
PER-CAPITA INCOME IN SUB-SAHARAN AFRICA LAGS BEHIND OTHER REGIONS
In a report on Africa's consumer market potential, Landry Signé notes that while income growth and labor productivity have been increasing in Africa in recent years, per-capita income levels remain below all other regions.
IN 2017 sub-Saharan Africa’s MVA was about $145 billion
Signé, who is a David M. Rubenstein Fellow in the Global Economy and Development Program at Brookings, also studied the potential of manufacturing and industrialization in Africa. In that report, he calls attention to some “worrying trends,” including low manufacturing value added in Africa compared to the rest of the world. However, he notes, “manufacturing in Africa has grown 3.5 percent annually from 2005 to 2014—faster than it has in the rest of the world.”
In 2019, about 70 percent of the world’s poor will live in Africa
Homi Kharas, Kristofer Hamel, and Martin Hofer, writing on the reduction of extreme poverty worldwide, say that “the good news is that 2019 will start with the lowest prevalence of extreme poverty ever recorded in human history—less than 8 percent.” However, the reduction rate is slowing, and Africa's share is rising. “However,” the authors add, “there is light at the end of the tunnel. In 2019, for the first time since the enactment of the [Sustainable Development Goals], Africa will start reducing the absolute number of people living in extreme poverty, albeit very modestly.”
By Fred Dews
Three charts highlighting trends and data related to Brookings research on sub-Saharan Africa. For more analysis and commentary on this topic, visit the Africa Growth Initiative, and also visit AGI's weekly series “https://www.brookings.edu/blog/africa-in-focus/2018/12/14/figure-of-the-week-climate-change-vulnerability-and-urban-population-growth/Figure of the week: Climate change vulnerability and urban population growthhttp://webfeeds.brookings.edu/~/586604860/0/brookingsrss/topics/subsaharanafrica~Figure-of-the-week-Climate-change-vulnerability-and-urban-population-growth/
Fri, 14 Dec 2018 20:17:13 +0000https://www.brookings.edu/?p=553202

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By Nirav Patel

According to a study by the strategic consulting firm Maplecroft, the fastest growing cities in Africa are among the most susceptible to the threat of climate change over the next 30 years. Figure 1 combines the annual population growth of over 1800 cities from the U.N. World Urbanization Prospects database with a proprietary Climate Change Vulnerability Index (CCVI) to create a scatter plot showing the relationship between population growth and climate change.

The CCVI evaluates social, economic, and environmental factors to assess vulnerabilities across three core areas: exposure to climate-related natural disasters and sea-level rise; human sensitivity (in terms of population patterns, development, natural resources, agricultural dependency, and conflicts), and resilience (measuring the adaptive capacity of a country’s government and infrastructure) to combat climate change.

Figure 1 shows a striking relationship between climate change risk and population growth. Looking at the size of the bubble, which represents the size of the city in 2018, it is noticeable that small and medium-sized cities face disproportionate climate change risk. According to the study, 79 of Africa’s cities are rated extreme risk by the CCVI, including 15 capital cities and major commercial hubs. This list includes Kampala, Dar es Salaam, Abuja, Lagos, Addis Ababa, and Luanda.

Figure 1: The relationship between population growth and climate change

The study also measured financial risk using International Monetary Fund growth projections to develop estimates of economic exposure to climate change in 2023. This measure assesses the proportion of a cities’ gross regional product that will be at risk of loss to climate change. Lagos, Nigeria, and Addis Ababa, Ethiopia, both had among the highest economic exposure valued at about $128.5 billion and $69 billion, respectively.

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https://www.brookings.edu/wp-content/uploads/2018/12/Global_Cape-Town_Smog.jpg?w=279By Nirav Patel
According to a study by the strategic consulting firm Maplecroft, the fastest growing cities in Africa are among the most susceptible to the threat of climate change over the next 30 years. Figure 1 combines the annual population growth of over 1800 cities from the U.N. World Urbanization Prospects database with a proprietary Climate Change Vulnerability Index (CCVI) to create a scatter plot showing the relationship between population growth and climate change.
The CCVI evaluates social, economic, and environmental factors to assess vulnerabilities across three core areas: exposure to climate-related natural disasters and sea-level rise; human sensitivity (in terms of population patterns, development, natural resources, agricultural dependency, and conflicts), and resilience (measuring the adaptive capacity of a country’s government and infrastructure) to combat climate change.
Figure 1 shows a striking relationship between climate change risk and population growth. Looking at the size of the bubble, which represents the size of the city in 2018, it is noticeable that small and medium-sized cities face disproportionate climate change risk. According to the study, 79 of Africa’s cities are rated extreme risk by the CCVI, including 15 capital cities and major commercial hubs. This list includes Kampala, Dar es Salaam, Abuja, Lagos, Addis Ababa, and Luanda.
Figure 1: The relationship between population growth and climate change
The study also measured financial risk using International Monetary Fund growth projections to develop estimates of economic exposure to climate change in 2023. This measure assesses the proportion of a cities’ gross regional product that will be at risk of loss to climate change. Lagos, Nigeria, and Addis Ababa, Ethiopia, both had among the highest economic exposure valued at about $128.5 billion and $69 billion, respectively. By Nirav Patel
According to a study by the strategic consulting firm Maplecroft, the fastest growing cities in Africa are among the most susceptible to the threat of climate change over the next 30 years. Figure 1 combines the annual population ... https://www.brookings.edu/opinions/korea-africa-relations-hold-enormous-trade-development-and-investment-potential/Korea-Africa relations hold enormous trade, development, and investment potentialhttp://webfeeds.brookings.edu/~/586465618/0/brookingsrss/topics/subsaharanafrica~KoreaAfrica-relations-hold-enormous-trade-development-and-investment-potential/
Fri, 14 Dec 2018 17:11:34 +0000https://www.brookings.edu/?post_type=opinion&p=553121

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By Landry Signé

The inaugural Seoul Dialogue on Africa, held on Dec. 4-5, focused on the prospects of mutually beneficial partnerships between South Korea and African countries, with the theme of “peace and prosperity in Africa and beyond.” In the context of building a partnerships between Africa and emerging powers such as China, Brazil and India, among others, the historic dialogue represented the initiative of the Korea-Africa Foundation and South Korea’s Ministry of Foreign Affairs to develop a unique and friendly approach to Korea-Africa relations and “raise people’s awareness of Africa in the Republic of Korea (ROK).”

The ROK has shown its clear determination to better understand Africa’s successes, challenges and prospects, as well as the ways Korean citizens could collaborate with African businesses and governments on projects. Korea’s perspective emphasizes building upon African expertise and increasing dialogue between experts. The ROK has innovated with its first Korea-Africa Youth Forum, held a day before the Seoul Dialogue on Africa, which encouraged young people “to set up global startups by raising awareness of the possibility of Africa as a new startup market and by increasing exchanges between Korean youth and African youth staying in the ROK.”

Young people are the key to sustainable growth and prosperity. By 2030, Africa is expected to be home to 1.7 billion people—potential consumers with over $6.7 trillion (U.S.) of combined consumer and business spending. These numbers indicate the enormous potential of Korean-African relations and the benefits that could result from economic and social partnerships.

Conversations at the dialogue emphasized the significant potential for bilateral economic partnerships given Africa’s high level of economic growth and expanding business opportunities and Korea’s experience of rapid economic development. Participants also addressed Korea’s support for peace-building and long-term rapprochement activities.

The ROK has shown commitment to providing essential support to African countries and continental institutions in their mission to create an integrated, prosperous, peaceful and strong continent. With African economic output projected to increase to $29 trillion (U.S.) by 2050, there is significant opportunity for Korean and African entrepreneurs looking to build or expand businesses in Africa.

The landmark forum in Seoul should occur each year to address ever-changing issues surrounding Africa’s growth and its partnership with Korea. Looking ahead, the Korea-Africa partnership could be augmented with the creation of a high-level trade and investment forum or the inclusion of an additional day in the dialogue that aims to facilitate negotiations and transactions between African and Korean businesses. The Korea-Africa Youth Forum is an excellent beginning for long-term engagement, but such initiatives also should facilitate deals in the short run. Along these lines, Korea could create an investment fund to support Korean startups doing business with Africa and joint ventures between Korean and African partners to help lift barriers to doing business and hasten economic partnerships.

Given its successful experience, the ROK could collaborate by developing broader technical support and capacity-building both at the continental level (supporting the African Continental Free Trade Area or African Union, for example) and the national levels (in countries of preference, including large economies such as South Africa, Nigeria, Ethiopia, Egypt, Angola, and Morocco, but also open economies such as Rwanda). Such partnerships could help generate cutting-edge research to inform policies, build human capital, and advance effective institutional, technical and policy configurations critical to policy success.

Korea is one of the leaders of the Fourth Industrial Revolution, so special attention could be paid to digital transformation and collaboration in digital government, businesses in industries without smokestacks, and cybersecurity.

To build the basis for long-term relations and mutual support, Korea could increase the number of education, volunteering, and cultural exchange opportunities for Koreans in Africa. The ROK could increase its support for Koreans conducting research on Africa, as well as for the development of a Korean-African joint research initiative, laying the foundation for long-term friendship. Future agendas would gain from including experts’ perspectives on climate change, women and youth economic and political empowerment, and the future of technology, among other topics.

The enthusiasm at this inaugural dialogue indicates these bilateral forums can have exponential effects on development, investment, and political initiatives between emerging partners. Africa’s advocates in Seoul and throughout other emerging economies should continue to share their collective knowledge with the citizens and leaders of their countries. As the profiles of South Korea’s African initiatives grow, Korea must encourage international organizations’ acceptance of key development and economic policies. The ROK’s growth in recent decades is remarkable and serves as inspiration for Africa’s potential at this transformative stage in its history.

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By Landry Signé
The inaugural Seoul Dialogue on Africa, held on Dec. 4-5, focused on the prospects of mutually beneficial partnerships between South Korea and African countries, with the theme of “peace and prosperity in Africa and beyond.” In the context of building a partnerships between Africa and emerging powers such as China, Brazil and India, among others, the historic dialogue represented the initiative of the Korea-Africa Foundation and South Korea’s Ministry of Foreign Affairs to develop a unique and friendly approach to Korea-Africa relations and “raise people’s awareness of Africa in the Republic of Korea (ROK).”
The ROK has shown its clear determination to better understand Africa’s successes, challenges and prospects, as well as the ways Korean citizens could collaborate with African businesses and governments on projects. Korea’s perspective emphasizes building upon African expertise and increasing dialogue between experts. The ROK has innovated with its first Korea-Africa Youth Forum, held a day before the Seoul Dialogue on Africa, which encouraged young people “to set up global startups by raising awareness of the possibility of Africa as a new startup market and by increasing exchanges between Korean youth and African youth staying in the ROK.”
Young people are the key to sustainable growth and prosperity. By 2030, Africa is expected to be home to 1.7 billion people—potential consumers with over $6.7 trillion (U.S.) of combined consumer and business spending. These numbers indicate the enormous potential of Korean-African relations and the benefits that could result from economic and social partnerships.
Conversations at the dialogue emphasized the significant potential for bilateral economic partnerships given Africa’s high level of economic growth and expanding business opportunities and Korea’s experience of rapid economic development. Participants also addressed Korea’s support for peace-building and long-term rapprochement activities.
The ROK has shown commitment to providing essential support to African countries and continental institutions in their mission to create an integrated, prosperous, peaceful and strong continent. With African economic output projected to increase to $29 trillion (U.S.) by 2050, there is significant opportunity for Korean and African entrepreneurs looking to build or expand businesses in Africa.
The landmark forum in Seoul should occur each year to address ever-changing issues surrounding Africa’s growth and its partnership with Korea. Looking ahead, the Korea-Africa partnership could be augmented with the creation of a high-level trade and investment forum or the inclusion of an additional day in the dialogue that aims to facilitate negotiations and transactions between African and Korean businesses. The Korea-Africa Youth Forum is an excellent beginning for long-term engagement, but such initiatives also should facilitate deals in the short run. Along these lines, Korea could create an investment fund to support Korean startups doing business with Africa and joint ventures between Korean and African partners to help lift barriers to doing business and hasten economic partnerships.
Given its successful experience, the ROK could collaborate by developing broader technical support and capacity-building both at the continental level (supporting the African Continental Free Trade Area or African Union, for example) and the national levels (in countries of preference, including large economies such as South Africa, Nigeria, Ethiopia, Egypt, Angola, and Morocco, but also open economies such as Rwanda). Such partnerships could help generate cutting-edge research to inform policies, build human capital, and advance effective institutional, technical and policy configurations critical to policy success.
Korea is one ... By Landry Signé
The inaugural Seoul Dialogue on Africa, held on Dec. 4-5, focused on the prospects of mutually beneficial partnerships between South Korea and African countries, with the theme of “peace and prosperity in Africa and ... https://www.brookings.edu/blog/future-development/2018/12/13/rethinking-global-poverty-reduction-in-2019/Rethinking global poverty reduction in 2019http://webfeeds.brookings.edu/~/585849107/0/brookingsrss/topics/subsaharanafrica~Rethinking-global-poverty-reduction-in/
Thu, 13 Dec 2018 21:19:16 +0000https://www.brookings.edu/?p=552846

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By Homi Kharas, Kristofer Hamel, Martin Hofer

2018 could be a landmark moment in understanding global poverty dynamics. In June, we reported the start of a new poverty narrative, one that brought the plight of Africa squarely into focus. In September, we also discussed an unprecedented tipping point in global wealth prospects: More than half the world is now middle class or richer, fueled by a rising Asian middle class. As Steven Pinker and others observed, the rise of the global middle class—and the implications on policies, industry, and political economy—might have been one of the most important “ignored” stories of 2018.

To prepare for the year ahead, data scientists at World Data Lab responsible for uncovering these findings have updated the World Poverty Clock to take into account recently released data and forecasts from the World Bank and IMF, as well as refinements in poverty measurement in India. The biggest headline from their work may be that when official numbers for India’s extreme poverty are published later this year, less than 50 million people will likely be living below $1.90 per day, compared to 268 million in 2011, the last year for which official data on Indian poverty are available.

Looking at poverty trends worldwide, World Data Lab now estimates that on New Year’s Day 2019, just under 600 million people across the world (excluding Syria) will live in extreme poverty. By 2030, this figure is expected to fall to some 436 million.

The good news is that 2019 will start with the lowest prevalence of extreme poverty ever recorded in human history—less than 8 percent. In all likelihood, this level will set the “ceiling” for a new era of even lower single-digit global poverty rates for the foreseeable future. The bad news, though, is that poverty reduction rates are expected to keep slowing down considerably over the next decade. Consequently, only 20 million people are likely to escape extreme poverty in 2019. At this rate, it will take five years for the global number to fall below 500 million—making it nearly impossible to end poverty by 2030.

Amid this context, several salient trends stand out, indicating a great divergence between stagnation in Africa and great progress in most other parts of the world (see Figure 1), notably India:

India’s success. The soon-to-be-largest country in the world has been reducing extreme poverty fast and the world may have underestimated India’s achievements. India’s last household survey of 2017/18 (to be released in 2019) captures household consumption more comprehensively—it will include an adjustment for owner-occupied housing and measure other items in accordance with common international practices. World Data Lab anticipates the effects of these methodological adjustments will result in a level of extreme poverty in India today of 50 million people, which will come down to 40 million (a poverty rate of below 3 percent) by end 2019.

Africa’s stagnation. In 2019, some 70 percent of the world’s poor will live in Africa, up from 50 percent five years ago. By 2023, Africa’s share will rise to over 80 percent (up from 60 percent in 2016). For Africa to end poverty by 2030, more than one person would need to escape poverty every second; instead, Africa currently adds poor people. However, there is light at the end of the tunnel. In 2019, for the first time since the enactment of the SDGs, Africa will start reducing the absolute number of people living in extreme poverty, albeit very modestly.

The road to 2030. Asia will outperform every other developing region and in early 2019, the world’s largest continent will have an average poverty rate of below 3 percent. That share is projected to fall further to only 1 percent by 2025. Three Asian countries that will not end poverty by 2030 are Afghanistan, North Korea, and Papua New Guinea. South America currently has only a 4 percent aggregate poverty level, but rates are declining slowly. Disaggregated data suggest Venezuela, Suriname, and Bolivia appear off-track for ending poverty by 2030. They are joined by Guatemala, Honduras, Belize, and Haiti in Central America and the Caribbean.

In contrast to other regions where selected countries have on-going issues with poverty reduction, almost all of Africa, especially sub-Saharan Africa, is off-track for ending extreme poverty. Indeed, 13 African countries are expected to see an increase in the absolute numbers of extreme poor between now and 2030. Today, Nigeria is the “poverty capital of the world”. If it is unable to change its current trajectory, it will be home to 110 million people living in extreme poverty by the year 2030. The second position in World Data Lab’s Global Poverty Ranking is currently occupied by the Democratic Republic of Congo (DRC), which will enter 2019 with more than 59 million poor people and end in 2030 with 61 million under current trajectories. By the end of 2030, nine of the 10 countries with the most poor people will be in Africa, up from seven countries today (see Figure 2).

Figure 2. Global Poverty Ranking: African countries will represent 9 out of the top 10 by 2030

Note: Rankings end 2018 and projections for end 2030; Source: World Data Lab projections (base case)

In 2016, when the SDG era started, Africa accounted for just over 60 percent of global poverty. Today, it is over 70 percent. By 2030, it could be close to 90 percent. It seems clear that Africa remains the last frontier of the world’s effort to end extreme poverty by 2030.

Will 2019 be the year that global attention, energy, and resources are finally mobilized to improve the situation in Africa, the last frontier of global poverty?

Note: For questions on the underlying data model and access to the data please contact Kristofer Hamel (kristofer.hamel@worlddata.io).

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https://www.brookings.edu/wp-content/uploads/2018/12/global_nigeria_001.jpg?w=270By Homi Kharas, Kristofer Hamel, Martin Hofer
2018 could be a landmark moment in understanding global poverty dynamics. In June, we reported the start of a new poverty narrative, one that brought the plight of Africa squarely into focus. In September, we also discussed an unprecedented tipping point in global wealth prospects: More than half the world is now middle class or richer, fueled by a rising Asian middle class. As Steven Pinker and others observed, the rise of the global middle class—and the implications on policies, industry, and political economy—might have been one of the most important “ignored” stories of 2018.
To prepare for the year ahead, data scientists at World Data Lab responsible for uncovering these findings have updated the World Poverty Clock to take into account recently released data and forecasts from the World Bank and IMF, as well as refinements in poverty measurement in India. The biggest headline from their work may be that when official numbers for India’s extreme poverty are published later this year, less than 50 million people will likely be living below $1.90 per day, compared to 268 million in 2011, the last year for which official data on Indian poverty are available.
Looking at poverty trends worldwide, World Data Lab now estimates that on New Year’s Day 2019, just under 600 million people across the world (excluding Syria) will live in extreme poverty. By 2030, this figure is expected to fall to some 436 million.
The good news is that 2019 will start with the lowest prevalence of extreme poverty ever recorded in human history—less than 8 percent. In all likelihood, this level will set the “ceiling” for a new era of even lower single-digit global poverty rates for the foreseeable future. The bad news, though, is that poverty reduction rates are expected to keep slowing down considerably over the next decade. Consequently, only 20 million people are likely to escape extreme poverty in 2019. At this rate, it will take five years for the global number to fall below 500 million—making it nearly impossible to end poverty by 2030.
Amid this context, several salient trends stand out, indicating a great divergence between stagnation in Africa and great progress in most other parts of the world (see Figure 1), notably India:
- India’s success. The soon-to-be-largest country in the world has been reducing extreme poverty fast and the world may have underestimated India’s achievements. India’s last household survey of 2017/18 (to be released in 2019) captures household consumption more comprehensively—it will include an adjustment for owner-occupied housing and measure other items in accordance with common international practices. World Data Lab anticipates the effects of these methodological adjustments will result in a level of extreme poverty in India today of 50 million people, which will come down to 40 million (a poverty rate of below 3 percent) by end 2019. - Africa’s stagnation. In 2019, some 70 percent of the world’s poor will live in Africa, up from 50 percent five years ago. By 2023, Africa’s share will rise to over 80 percent (up from 60 percent in 2016). For Africa to end poverty by 2030, more than one person would need to escape poverty every second; instead, Africa currently adds poor people. However, there is light at the end of the tunnel. In 2019, for the first time since the enactment of the SDGs, Africa will start reducing the absolute number of people living in extreme poverty, albeit very modestly. - The road to 2030. Asia will outperform every other developing region and in early 2019, the world’s largest continent will have an average poverty rate of below 3 percent. That share is projected to fall further to only 1 percent by 2025. Three Asian countries that will not end poverty by 2030 are Afghanistan, North Korea, and Papua ... By Homi Kharas, Kristofer Hamel, Martin Hofer
2018 could be a landmark moment in understanding global poverty dynamics. In June, we reported the start of a new poverty narrative, one that brought the plight of Africa squarely into focus.https://www.brookings.edu/research/africas-consumer-market-potential/Africa’s consumer market potentialhttp://webfeeds.brookings.edu/~/585144454/0/brookingsrss/topics/subsaharanafrica~Africas-consumer-market-potential/
Wed, 12 Dec 2018 15:09:46 +0000https://www.brookings.edu/?post_type=research&p=552481

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By Landry Signé

Africa is one of the fastest-growing consumer markets in the world. Household consumption has increased even faster than its gross domestic product (GDP) in recent years—and that average annual GDP growth has consistently outpaced the global average. In light of the increasing affluence, population growth, urbanization rates, and rapid spread of access to the internet and mobile phones on the continent, Africa’s emerging economies present exciting opportunities for expansion in retail and distribution.

In fact, consumer expenditure on the continent has grown at a compound annual rate of 3.9 percent since 2010 and reached $1.4 trillion in 2015. This figure is expected to reach $2.1 trillion by 2025, and $2.5 trillion by 2030. Also, in 2030, if the Continental Free Trade Area (CFTA) is properly implemented, a single continental market for goods and services will be operational, offering corporations different points of entry to the continent and a potential market of 1.7 billion people.

Studies have shown that African consumers are savvy and brand loyal. Local vendors are entrepreneurial and present key assets for distribution chains. At the same time, the vast majority of consumer spending on the continent currently takes place in informal, roadside markets, even in those countries with the most well-developed retail and distribution markets. This disconnect signals enormous potential for growth as African consumers shift from the informal toward more formal forms of consumption—including shopping malls, supermarkets, and eventually even e-commerce—a process that is already underway in all but the most fragile and underdeveloped countries.

Even relatively frontier markets are receiving increasing attention from foreign investors, who consider factors such as favorability of the tax and regulatory environment, the stability of the political system, access to human and financial capital, and proximity to key markets. For example, when recent challenges increased the level of country risk in Nigeria, the largest African economy and historically common West African target of foreign investors, many companies looked to Ghana to establish their regional hub of operations, as its healthy business climate is bolstered by a stable, civilian-led democratic regime and increasingly peaceful neighborhood.

By 2030, the largest consumer markets will include Nigeria, Egypt, and South Africa. There will also be lucrative opportunities in Algeria, Angola, Ethiopia, Ghana, Kenya, Morocco, Sudan, Tunisia, and Tanzania, among other African countries. For example, Ethiopia has been reported to be one of the fastest-growing economies in the world over the past decade, with an average annual GDP growth rate of 10.5 percent from 2005-06 to 2015-16. In addition, with one of the highest savings rates on the continent, its economy reflects a more stable and secure consumer sentiment. The administration has also capitalized on the country’s connectivity boom by setting up the Ethiopia Commodity Exchange (ECX) to help overcome market distortions, especially in the agricultural sector. The ECX call-in service already receives over 1.5 million calls each month. Foreign companies, such as Coca-Cola and Heineken, recognize Ethiopia’s potential and have made substantial investments. More generally, African business leaders and investors such as Aliko Dangote are aggressively investing across the continent, which is a sign of their confidence in the future for growth in African consumerism.

This report offers business leaders an overview of Africa’s biggest opportunities in the consumer market sector, discussing trends and perspectives from now to 2030. It provides policymakers with an accessible perspective on the options likely to attract private investors, accelerate consumer markets’ development, and contribute to growth and poverty alleviation, all of which will also facilitate the fulfillment of the United Nation’s Sustainable Development Goals and the African Union’s Agenda 2063.

]]>
By Landry Signé
Africa is one of the fastest-growing consumer markets in the world. Household consumption has increased even faster than its gross domestic product (GDP) in recent years—and that average annual GDP growth has consistently outpaced the global average. In light of the increasing affluence, population growth, urbanization rates, and rapid spread of access to the internet and mobile phones on the continent, Africa’s emerging economies present exciting opportunities for expansion in retail and distribution.
In fact, consumer expenditure on the continent has grown at a compound annual rate of 3.9 percent since 2010 and reached $1.4 trillion in 2015. This figure is expected to reach $2.1 trillion by 2025, and $2.5 trillion by 2030. Also, in 2030, if the Continental Free Trade Area (CFTA) is properly implemented, a single continental market for goods and services will be operational, offering corporations different points of entry to the continent and a potential market of 1.7 billion people.
Studies have shown that African consumers are savvy and brand loyal. Local vendors are entrepreneurial and present key assets for distribution chains. At the same time, the vast majority of consumer spending on the continent currently takes place in informal, roadside markets, even in those countries with the most well-developed retail and distribution markets. This disconnect signals enormous potential for growth as African consumers shift from the informal toward more formal forms of consumption—including shopping malls, supermarkets, and eventually even e-commerce—a process that is already underway in all but the most fragile and underdeveloped countries.
Even relatively frontier markets are receiving increasing attention from foreign investors, who consider factors such as favorability of the tax and regulatory environment, the stability of the political system, access to human and financial capital, and proximity to key markets. For example, when recent challenges increased the level of country risk in Nigeria, the largest African economy and historically common West African target of foreign investors, many companies looked to Ghana to establish their regional hub of operations, as its healthy business climate is bolstered by a stable, civilian-led democratic regime and increasingly peaceful neighborhood.
By 2030, the largest consumer markets will include Nigeria, Egypt, and South Africa. There will also be lucrative opportunities in Algeria, Angola, Ethiopia, Ghana, Kenya, Morocco, Sudan, Tunisia, and Tanzania, among other African countries. For example, Ethiopia has been reported to be one of the fastest-growing economies in the world over the past decade, with an average annual GDP growth rate of 10.5 percent from 2005-06 to 2015-16. In addition, with one of the highest savings rates on the continent, its economy reflects a more stable and secure consumer sentiment. The administration has also capitalized on the country’s connectivity boom by setting up the Ethiopia Commodity Exchange (ECX) to help overcome market distortions, especially in the agricultural sector. The ECX call-in service already receives over 1.5 million calls each month. Foreign companies, such as Coca-Cola and Heineken, recognize Ethiopia’s potential and have made substantial investments. More generally, African business leaders and investors such as Aliko Dangote are aggressively investing across the continent, which is a sign of their confidence in the future for growth in African consumerism.
This report offers business leaders an overview of Africa’s biggest opportunities in the consumer market sector, discussing trends and perspectives from now to 2030. It provides policymakers with an accessible perspective on the options likely to attract private investors, accelerate consumer markets’ development, and contribute to growth and poverty alleviation, all of which will ... By Landry Signé
Africa is one of the fastest-growing consumer markets in the world. Household consumption has increased even faster than its gross domestic product (GDP) in recent years—and that average annual GDP growth has ... https://www.brookings.edu/blog/africa-in-focus/2018/12/08/africa-in-the-news-south-africa-land-reform-advances-drc-ebola-update-and-presidential-term-limits-in-sudan/Africa in the news: South Africa land reform advances, DRC Ebola update, and presidential term limits in Sudanhttp://webfeeds.brookings.edu/~/584371500/0/brookingsrss/topics/subsaharanafrica~Africa-in-the-news-South-Africa-land-reform-advances-DRC-Ebola-update-and-presidential-term-limits-in-Sudan/
Sat, 08 Dec 2018 11:00:59 +0000https://www.brookings.edu/?p=551941

The utility company faces deep financial problems with more than $30 billion in debt and an inability to sell enough power to cover costs. Eskom has regularly received government support in the form of bailouts and state guarantees.

According to analysts, prolonged power cuts will likely hurt economic growth in the first quarter of 2019.

Update on Ebola outbreak in DRC

The Ebola outbreak in the Democratic Republic of the Congo (DRC) continued to spread through North Kivu province this week, reaching the city of Butembo and several isolated areas. New cases reported have increased the outbreak total to 458 since it began in August 2018, with a death total of 263 people. According to the World Health Organization, the outbreak is now the second worst in history behind the outbreak in West Africa, which killed more than 11,000 people between 2014 and 2016.

This week, Sudanese lawmakers backed a constitutional amendment to extend presidential term limits. President Omar al-Bashir, who has been in power since 1989, is currently expected to step down in 2020, when his term ends. President al-Bashir has won both elections since the 2005 constitutional amendment imposed a two term-limit to presidency.

Parliament’s speaker, Ibrahim Ahmed Omar, told reporters that he “received a memorandum from 33 parties representing 294 deputies to amend the constitution with regard to the number of times the president’s candidacy is allowed.” Earlier this year, Sudan’s ruling National Congress Party nominated al-Bashir to run as its candidate in the 2020 elections.

In other news, Zambia’s high court ruled on Friday that President Edgar Lungu may run in the 2021 elections, finding that by doing so, he would not be breaching the two-term constitutional limit. This ruling is based on the technicality of what constitutes a term rather an extension of time in power. Lungu’s first term lasted only for one year and six months and his supporters argue that the constitution says a president is only considered to have served a term if he is in office for at least three of the five-years per term.

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By Dhruv Gandhi
Rolling power cuts and land reform moves forward in South Africa
Last week, South Africa’s largest power utility company, Eskom, began implementing daily rolling blackouts to stabilize supply on the power grid. The blackouts are expected to continue for several months as the utility company faces financial and operational challenges. Eskom previously enacted similar grid stabilization measures in 2008 and 2015. The current round of power cuts has been necessitated by plant breakdowns, coal shortages, and construction delays.
The utility company faces deep financial problems with more than $30 billion in debt and an inability to sell enough power to cover costs. Eskom has regularly received government support in the form of bailouts and state guarantees.
According to analysts, prolonged power cuts will likely hurt economic growth in the first quarter of 2019.
In other news, this week, South Africa’s National Assembly approved a report that recommends amending the constitution to make land expropriation without compensation possible. The report is part of an ongoing process to implement land reforms in South Africa where the white minority, traditional leaders, and elites own most of the land. As a next step, the National Assembly approved the creation of a 25-person committee that will draft a new bill on land reform and share it with parliament before April 2019.
Update on Ebola outbreak in DRC
The Ebola outbreak in the Democratic Republic of the Congo (DRC) continued to spread through North Kivu province this week, reaching the city of Butembo and several isolated areas. New cases reported have increased the outbreak total to 458 since it began in August 2018, with a death total of 263 people. According to the World Health Organization, the outbreak is now the second worst in history behind the outbreak in West Africa, which killed more than 11,000 people between 2014 and 2016.
An experimental vaccine has been used to help contain the spread of the outbreak, with more than 42,000 doses administered this year within the DRC. However, a more widespread outbreak in Butembo or other urban areas could render vaccine supplies insufficient. Containing the outbreak has been particularly difficult for health workers due to active conflicts and political instability in the area, and the number of Ebola cases has surged during periods of security deterioration.
Health officials warn that large public gatherings before and during the upcoming general election scheduled for December 23, could pose a future challenge to reducing the spread of the epidemic.
Sudan’s parliament backs constitutional amendment to extend presidential term limits
This week, Sudanese lawmakers backed a constitutional amendment to extend presidential term limits. President Omar al-Bashir, who has been in power since 1989, is currently expected to step down in 2020, when his term ends. President al-Bashir has won both elections since the 2005 constitutional amendment imposed a two term-limit to presidency.
Parliament’s speaker, Ibrahim Ahmed Omar, told reporters that he “received a memorandum from 33 parties representing 294 deputies to amend the constitution with regard to the number of times the president’s candidacy is allowed.” Earlier this year, Sudan’s ruling National Congress Party nominated al-Bashir to run as its candidate in the 2020 elections.
In other news, Zambia’s high court ruled on Friday that President Edgar Lungu may run in the 2021 elections, finding that by doing so, he would not be breaching the two-term constitutional limit. This ruling is based on the technicality of what constitutes a term rather an extension of time in power. Lungu’s first term lasted only for one year and six months and his supporters argue that the constitution says a president is only considered to have served a term if he is in office for at ... By Dhruv Gandhi
Rolling power cuts and land reform moves forward in South Africa
Last week, South Africa’s largest power utility company, Eskom, began implementing daily rolling blackouts to stabilize supply on the power ... https://www.brookings.edu/blog/order-from-chaos/2018/12/07/experts-discuss-power-transitions-in-africa/Experts discuss power transitions in Africahttp://webfeeds.brookings.edu/~/584272400/0/brookingsrss/topics/subsaharanafrica~Experts-discuss-power-transitions-in-Africa/
Fri, 07 Dec 2018 19:57:54 +0000https://www.brookings.edu/?p=551917

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By Adam Twardowski

The year 2018 has seen encouraging instances of peaceful power transition in Africa, but problem spots on the continent remain, as experts discussed recently at Brookings. On November 27, Michael O’Hanlon—senior fellow and director of the Africa Security Initiative at Brookings—hosted a panel discussion to assess democratic trends on the African continent.

The big picture

O’Hanlon asked Reuben Brigety—former U.S. ambassador to the African Union and current dean of the Elliott School of International Affairs at George Washington University—to provide a high-level view of the overall state of democracy in Africa today. Brigety cautioned: “Africa is big and diverse enough that you can find almost any fact pattern to support almost any view you want about trends.” He noted that the strength of democracy comes not only from elections, but also cultural habits, social norms, and governmental processes.

He contrasted Zimbabwe—which has held elections but otherwise is not a full democracy—with Ethiopia, which has yet to hold full free elections but has made dramatic moves toward opening up political space. Brigety observed that there is political commitment to democracy at the level of both the African Union and the regional economic communities, and so to the extent there is any kind of democratic backsliding on the continent, it is through subverting democratic practices rather than arguing outright for alternative authoritarian models.

Finally, Brigety cautioned that “there’s not an intrinsic democratic attractive force in Africa to be able to force or encourage many of those African states to achieve democratic practice,” in part because there is a lack of an active democracy agenda by the United States in Africa now. Without such a force, there won’t be a “substantial endogenous movement to resist the Chinese approach to economic development and political reform on the continent for the long term.”

O’Hanlon then turned to Georgetown Assistant Professor and Brookings Nonresident Fellow Ken Opalo to discuss overall trend lines for democracy in Africa. Opalo noted that for a long time, the West spent a lot of time, energy, and money on governance, and not enough on government—by which he meant being able to deliver goods and services to citizens.

Opalo referenced Chinese investment in Africa, which he observed has often made it possible for governments across the continent to provide services better. Governments with stronger capacity, coupled with electoral competition, “will likely push them in the right direction” as a means of keeping elected leaders accountable and giving them incentives to provide goods. Opalo also observed that countries like Rwanda, Angola, and others will use Chinese financing to build infrastructure, but will stay autocratic. “To the extent that China has been able to make governments [do things], it is pushing them either to be more accountable if they’re already democratic or less accountable, but still under the pressure to provide public goods and services.”

Finally, Opalo emphasized youth and urbanization in Africa. He said “it’s something that we don’t talk about much, but within our lifetime more than half of Africans will be living in towns and cities. They’ll need jobs—that will create incentive for populist politics in ways haven’t seen yet on the continent.” Opalo said that as Africans continue to urbanize, the importance of ethnic identities will wane, and more voters could be prone to populist appeals, which “will reshape electoral politics in Africa in ways that we’re not thinking about yet.”

Countries to watch

Which bellwether countries can help us gauge high-level democratic trends?

Brigety argued that there is no bellwether country in Africa that tends to affect other countries as they relate to governance. He said: “To the extent that there are trends, they tend to be regional, both because the economies are more closely linked and also…because those heads of state tend to know each other really quite well.” That said, Brigety observed that one can’t talk about the Democratic Republic of the Congo without also talking about Rwanda, or Nigeria for all of West Africa, or Kenya and Ethiopia as they relate to East Africa. Brigety explained that to him, the most interesting story in all of Africa right now is Ethiopia, where there are “extraordinary” political changes occurring in a country of great economic, political, strategic, and military importance.

Opalo agreed that Ethiopia is a bellwether for the Horn of Africa, with internal implications for Djibouti, Somalia, Sudan, and South Sudan. “But in East Africa, Tanzania is a big one, because what happens in Tanzania…will have implications for Rwanda, Burundi, and Uganda.” Referencing West Africa, Opalo said that “whatever happens in Togo will send a strong signal to the Sahelian states about what’s acceptance as a means of governance.” Finally, Opalo cited Côte d’Ivoire as an important bellwether state. As the biggest francophone country, what happens there will have implications for other francophone states outside of Senegal.

The Democratic Republic of the Congo

Then O’Hanlon raised the looming elections in the Democratic Republic of the Congo. Brigety said he is not optimistic about the Congo, because “there is nothing in the historical record to suggest there will be a free and fair election.” While observing that the Congo has all the makings for a prosperous country, it is so enormous that “it has yet to demonstrate the ability to govern itself coherently as a country.”

Opalo agreed that there is little hope for a genuine power transition, and said there must be efforts to show entrenched leaders that they can relinquish power and go into retirement without fear for their physical and financial security, or that of their families. Discussing political reform in Rwanda, Opalo noted that to promote democratic transition in a country, it is important to focus less on the head of state—in this case Paul Kagame—and more on the elites around him. Convincing the people around a leader that it is possible to maintain “the architecture of rule but rotate leadership at the top” is a challenge.

Later, during the Q&A session, O’Hanlon called on Sasha Lezhnev from the Enough Project in the audience to offer his thoughts on the upcoming presidential election in the Democratic Republic of the Congo. Lezhnev said that he is fairly pessimistic that the election will be free, fair, and transparent, but there is still a window for the United States and Europe to help influence and impact that process. Lezhnev explained that it appears, based on irregularities in the entire electoral process, that President Kabila and his inner circle of family and business are set up to rule through Emmanuel Ramazani Shadary. The United States should not adopt a “wait-and-see” approach, but rather influence the process to ensure it is fairer and more democratic.

Security concerns

O’Hanlon expressed concern about reductions in resources for U.S. Africa Command, or AFRICOM. U.S. defense strategy is prioritizing great power competition again, and a significant part of that competition is happening in Africa. Given that the role of AFRICOM is fairly modest, O’Hanlon argued that building up security capacity in places like the Central African Republic, Cameroon, or Gabon would send a message that the United States is not pulling back, but is rather fully engaged.

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By Adam Twardowski
The year 2018 has seen encouraging instances of peaceful power transition in Africa, but problem spots on the continent remain, as experts discussed recently at Brookings. On November 27, Michael O’Hanlon—senior fellow and director of the Africa Security Initiative at Brookings—hosted a panel discussion to assess democratic trends on the African continent.
The big picture
O’Hanlon asked Reuben Brigety—former U.S. ambassador to the African Union and current dean of the Elliott School of International Affairs at George Washington University—to provide a high-level view of the overall state of democracy in Africa today. Brigety cautioned: “Africa is big and diverse enough that you can find almost any fact pattern to support almost any view you want about trends.” He noted that the strength of democracy comes not only from elections, but also cultural habits, social norms, and governmental processes.
He contrasted Zimbabwe—which has held elections but otherwise is not a full democracy—with Ethiopia, which has yet to hold full free elections but has made dramatic moves toward opening up political space. Brigety observed that there is political commitment to democracy at the level of both the African Union and the regional economic communities, and so to the extent there is any kind of democratic backsliding on the continent, it is through subverting democratic practices rather than arguing outright for alternative authoritarian models.
Finally, Brigety cautioned that “there’s not an intrinsic democratic attractive force in Africa to be able to force or encourage many of those African states to achieve democratic practice,” in part because there is a lack of an active democracy agenda by the United States in Africa now. Without such a force, there won’t be a “substantial endogenous movement to resist the Chinese approach to economic development and political reform on the continent for the long term.”
O’Hanlon then turned to Georgetown Assistant Professor and Brookings Nonresident Fellow Ken Opalo to discuss overall trend lines for democracy in Africa. Opalo noted that for a long time, the West spent a lot of time, energy, and money on governance, and not enough on government—by which he meant being able to deliver goods and services to citizens.
Opalo referenced Chinese investment in Africa, which he observed has often made it possible for governments across the continent to provide services better. Governments with stronger capacity, coupled with electoral competition, “will likely push them in the right direction” as a means of keeping elected leaders accountable and giving them incentives to provide goods. Opalo also observed that countries like Rwanda, Angola, and others will use Chinese financing to build infrastructure, but will stay autocratic. “To the extent that China has been able to make governments [do things], it is pushing them either to be more accountable if they’re already democratic or less accountable, but still under the pressure to provide public goods and services.”
Finally, Opalo emphasized youth and urbanization in Africa. He said “it’s something that we don’t talk about much, but within our lifetime more than half of Africans will be living in towns and cities. They’ll need jobs—that will create incentive for populist politics in ways haven’t seen yet on the continent.” Opalo said that as Africans continue to urbanize, the importance of ethnic identities will wane, and more voters could be prone to populist appeals, which “will reshape electoral politics in Africa in ways that we’re not thinking about yet.”
Countries to watch
Which bellwether countries can help us gauge high-level democratic trends?
Brigety argued that there is no bellwether ... By Adam Twardowski
The year 2018 has seen encouraging instances of peaceful power transition in Africa, but problem spots on the continent remain, as experts discussed recently at Brookings. On November 27, Michael O’https://www.brookings.edu/blog/africa-in-focus/2018/12/07/figures-of-the-week-wage-growth-and-employment-in-africa/Figures of the week: Wage growth and employment in Africahttp://webfeeds.brookings.edu/~/584237772/0/brookingsrss/topics/subsaharanafrica~Figures-of-the-week-Wage-growth-and-employment-in-Africa/
Fri, 07 Dec 2018 16:21:08 +0000https://www.brookings.edu/?p=551819

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By Payce Madden

Recently, the International Labour Organization (ILO) published the sixth edition of the annual Global Wage Report, which provides comparative information on global and regional wages. The 2018/19 report finds that in 2017, global wage growth fell to its lowest rate since 2008, despite a recovery in global economic growth and a reduction in unemployment in many major countries.

In 2017, Africa’s negative wage growth of -3.0 percent contributed to global low wage growth trends. Africa was the only region to experience negative average real wage growth, although some countries in other regions, particularly Latin America and the Caribbean, also faced negative wage growth. The decrease in average wage growth on the continent was mostly driven by falling real wages in populous Egypt, where currency devaluation led to very high inflation rates, and Nigeria. With these two countries removed from the sample, Figure 1 shows that real wages in the rest of Africa moderately increased in 2017, with a slight improvement over the rates of the previous three years. Wage growth remained much lower, however, than during the period from 2009 to 2013, when growth averaged a rate of 3.5 percent.

Wage growth rates have varied widely across Africa over the past ten years. As shown in Figure 2, while Senegal, Ghana, and Zambia have all experienced average wage growth rates of more than 12 percent, the East African Community has faced particular challenges, with negative real wage growth in all of its member countries for which data exists. While wage employment is limited in many African countries—the World Bank estimates that only 26 percent of total employment in Africa is comprised of wage and salaried workers—low and stagnant or decreasing wages have still had significant negative effects on a large population of wage employees.

Figure 2: Real wage growth in Africa by country, 2008-17

Even where growth is positive, the report states that wages in most of Africa remain low. Globalization and technology have contributed to wage and income growth in some countries, but benefits have been uneven; it will be important for African countries to generate further gains in these areas to progress towards wages that are sufficient to adequately cover the needs of workers and their families. Another essential challenge is to ensure that wage growth reaches informal workers.

According to the report, some countries have recently undertaken measures to increase wages and strengthen labor protection: South Africa introduced a national minimum wage in 2018, while some recent initiatives have sought to extend protection to vulnerable workers and engage in collective bargaining. African policymakers and civil society organizations should consider pursuing similar initiatives as African economies advance and the proportion of workers who become wage employees increases.

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https://www.brookings.edu/wp-content/uploads/2018/12/Global_Factory_Workers_Rwanda.jpg?w=279By Payce Madden
Recently, the International Labour Organization (ILO) published the sixth edition of the annual Global Wage Report, which provides comparative information on global and regional wages. The 2018/19 report finds that in 2017, global wage growth fell to its lowest rate since 2008, despite a recovery in global economic growth and a reduction in unemployment in many major countries.
In 2017, Africa’s negative wage growth of -3.0 percent contributed to global low wage growth trends. Africa was the only region to experience negative average real wage growth, although some countries in other regions, particularly Latin America and the Caribbean, also faced negative wage growth. The decrease in average wage growth on the continent was mostly driven by falling real wages in populous Egypt, where currency devaluation led to very high inflation rates, and Nigeria. With these two countries removed from the sample, Figure 1 shows that real wages in the rest of Africa moderately increased in 2017, with a slight improvement over the rates of the previous three years. Wage growth remained much lower, however, than during the period from 2009 to 2013, when growth averaged a rate of 3.5 percent.
Figure 1: Annual average real wage growth by region, 2006-17 (percentage change)
Wage growth rates have varied widely across Africa over the past ten years. As shown in Figure 2, while Senegal, Ghana, and Zambia have all experienced average wage growth rates of more than 12 percent, the East African Community has faced particular challenges, with negative real wage growth in all of its member countries for which data exists. While wage employment is limited in many African countries—the World Bank estimates that only 26 percent of total employment in Africa is comprised of wage and salaried workers—low and stagnant or decreasing wages have still had significant negative effects on a large population of wage employees.
Figure 2: Real wage growth in Africa by country, 2008-17
Even where growth is positive, the report states that wages in most of Africa remain low. Globalization and technology have contributed to wage and income growth in some countries, but benefits have been uneven; it will be important for African countries to generate further gains in these areas to progress towards wages that are sufficient to adequately cover the needs of workers and their families. Another essential challenge is to ensure that wage growth reaches informal workers.
According to the report, some countries have recently undertaken measures to increase wages and strengthen labor protection: South Africa introduced a national minimum wage in 2018, while some recent initiatives have sought to extend protection to vulnerable workers and engage in collective bargaining. African policymakers and civil society organizations should consider pursuing similar initiatives as African economies advance and the proportion of workers who become wage employees increases. By Payce Madden
Recently, the International Labour Organization (ILO) published the sixth edition of the annual Global Wage Report, which provides comparative information on global and regional wages. The 2018/19 report finds that in 2017, global ... https://www.brookings.edu/research/africas-tourism-potential/Africa’s tourism potentialhttp://webfeeds.brookings.edu/~/583537352/0/brookingsrss/topics/subsaharanafrica~Africas-tourism-potential/
Mon, 03 Dec 2018 19:44:30 +0000https://www.brookings.edu/?post_type=research&p=550929

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By Landry Signé

The tourism industry is playing an increasingly important role in the global economy, contributing 5 percent of gross domestic product (GDP), 30 percent of service exports, and 235 million jobs. Indeed, each year, approximately 1 billion people travel internationally. By 2030, consumer spending on tourism, hospitality, and recreation in Africa is projected to reach about $261.77 billion, $137.87 billion more than in 2015. From 1998 to 2015, service exports, including of “industries without smokestacks” such as tourism, have grown about six times faster than merchandise exports in Africa.

Given these trends, the travel and tourism industry has significant potential in Africa, notably due to the continent’s richness in natural resources and its potential to further develop cultural heritage, e.g., music. However, except in a few countries, such as Mauritius and Seychelles, where the tourism sector’s share of the economy is particularly large, tourism in Africa is still at an early stage of development and strongly connected with more general and longstanding development challenges, including infrastructure and security.

Aware of the potential for tourism, most countries in the region have already drafted strategic plans to develop the sector as an economic opportunity and development catalyst. For example, Gambia, Kenya, South Africa, and Tanzania are all putting significant efforts into advancing travel and tourism development. Botswana, Mauritius, Rwanda, and South Africa are working particularly hard to improve their business environment for tourism investment.

The African Union and sub-regional communities have also put tourism at the top of their agendas. For example, the African Union has endorsed the continent’s Tourism Action Plan (TAP) developed by the New Partnership for Africa’s Development (NEPAD), renamed African Union Development Agency (AUDA). The TAP recognizes tourism development among priority sector strategies of AUDA across Africa and aims to make Africa the destination of the 21st century. The 15 members of the Economic Community of West African States (ECOWAS) have introduced a visa policy that enables free movement of people across member states, offering a larger market to international travelers.

While improvements have been achieved in various areas, especially at the local level, much more needs to be done by both the public and the private sectors to fully tap Africa’s potential in the tourism industry. This report starts with an overview of tourism development in Africa and explores some of the key constraints that have prevented this sector from maturing. It identifies important stakeholders and potential opportunities for its future development. It also provides illustrative examples of countries representative of different trajectories of tourism development. Finally, with attention to current major policy reforms, the report draws conclusions about the future of the tourism sector in Africa.

The report aims to offer business leaders an overview of Africa’s biggest opportunities and risks in the tourism sector, discussing trends, drivers, perspectives, and strategies for effective investment. It also provides policymakers with some solutions related to the areas that need to be improved to attract private investors, accelerate tourism development, and contribute to growth and poverty alleviation, facilitating the fulfillment of the Sustainable Development Goals and the African Union’s Agenda 2063.

]]>
By Landry Signé
The tourism industry is playing an increasingly important role in the global economy, contributing 5 percent of gross domestic product (GDP), 30 percent of service exports, and 235 million jobs. Indeed, each year, approximately 1 billion people travel internationally. By 2030, consumer spending on tourism, hospitality, and recreation in Africa is projected to reach about $261.77 billion, $137.87 billion more than in 2015. From 1998 to 2015, service exports, including of “industries without smokestacks” such as tourism, have grown about six times faster than merchandise exports in Africa.
Given these trends, the travel and tourism industry has significant potential in Africa, notably due to the continent’s richness in natural resources and its potential to further develop cultural heritage, e.g., music. However, except in a few countries, such as Mauritius and Seychelles, where the tourism sector’s share of the economy is particularly large, tourism in Africa is still at an early stage of development and strongly connected with more general and longstanding development challenges, including infrastructure and security.
Aware of the potential for tourism, most countries in the region have already drafted strategic plans to develop the sector as an economic opportunity and development catalyst. For example, Gambia, Kenya, South Africa, and Tanzania are all putting significant efforts into advancing travel and tourism development. Botswana, Mauritius, Rwanda, and South Africa are working particularly hard to improve their business environment for tourism investment.
The African Union and sub-regional communities have also put tourism at the top of their agendas. For example, the African Union has endorsed the continent’s Tourism Action Plan (TAP) developed by the New Partnership for Africa’s Development (NEPAD), renamed African Union Development Agency (AUDA). The TAP recognizes tourism development among priority sector strategies of AUDA across Africa and aims to make Africa the destination of the 21st century. The 15 members of the Economic Community of West African States (ECOWAS) have introduced a visa policy that enables free movement of people across member states, offering a larger market to international travelers.
While improvements have been achieved in various areas, especially at the local level, much more needs to be done by both the public and the private sectors to fully tap Africa’s potential in the tourism industry. This report starts with an overview of tourism development in Africa and explores some of the key constraints that have prevented this sector from maturing. It identifies important stakeholders and potential opportunities for its future development. It also provides illustrative examples of countries representative of different trajectories of tourism development. Finally, with attention to current major policy reforms, the report draws conclusions about the future of the tourism sector in Africa.
The report aims to offer business leaders an overview of Africa’s biggest opportunities and risks in the tourism sector, discussing trends, drivers, perspectives, and strategies for effective investment. It also provides policymakers with some solutions related to the areas that need to be improved to attract private investors, accelerate tourism development, and contribute to growth and poverty alleviation, facilitating the fulfillment of the Sustainable Development Goals and the African Union’s Agenda 2063. By Landry Signé
The tourism industry is playing an increasingly important role in the global economy, contributing 5 percent of gross domestic product (GDP), 30 percent of service exports, and 235 million jobs. Indeed, each year, approximately ...